Can Gas Cost get any Higher ?

You can talk about anything here

Moderator: Global Moderator

StrokeyBlofeld
Clan Leader
Clan Leader
Posts: 2822
Joined: Mon Nov 12, 2007 3:36 am
Location: Bristol UK
Contact:

Re: Can Gas Cost get any Higher ?

Post by StrokeyBlofeld »

[quote=""Cyclohexane""][ (only about $100 more a month than what I pay per month for electricity and that is definitely going to increase).
[/quote]

Your electricity costs you $400 a month????? That's a crazy big bill!!! My electric is about £8 a week, (£32 a month, approx $65).

BenS64
Colonel
Colonel
Posts: 503
Joined: Thu Apr 17, 2008 4:29 pm
Location: Bloody England

Re: Can Gas Cost get any Higher ?

Post by BenS64 »

[quote=""StrokeyBlofeld""][quote=""Cyclohexane""][ (only about $100 more a month than what I pay per month for electricity and that is definitely going to increase).
[/quote]

Your electricity costs you $400 a month????? That's a crazy big bill!!! My electric is about £8 a week, (£32 a month, approx $65).[/quote]
thats a cheap electricity bill strokey!

User avatar
LaZy
Honorary Officer
Posts: 2444
Joined: Sat Jan 12, 2008 3:44 am
Location: Ferragudo Portugal
Contact:

Re: Can Gas Cost get any Higher ?

Post by LaZy »

[quote=""lordandcount""]You guys in america are still lucky with benzine. Here it is 2 euro/litre cuz of tax etc[/quote]

U noob. Try putting "benzine" in ur dads car just 2 c what happens :P

Wikipedia states:"Petroleum ether, also known as benzine, X4 or Ligroin, is a group of various volatile, highly flammable, liquid hydrocarbon mixtures used chiefly as nonpolar solvents. Petroleum ether is obtained from petroleum refineries as the portion of the distillate which is intermediate between the lighter naphtha and the heavier kerosene."

U mean gasoline (which is a liquid) unlike what the smart americans refere 2 as "gas" (which, as the name suggests, is a gas).

In Portugal our petrol prices have gone up again 2day, 12 raise this year! Official figures show that for every €1 ($1.57) of diesel or petrol we load our car with €0.31 goes into the actual cost of the product ( ie extraction, transport, refinery costs, transport and marketing) €0.60 go into TAX and the remaining portions are due 2 market speculation and company profits. SIXTY f´ing percent!!!!!! Why do we put up with this? If it werent for these absurd tax "add ons" I could actually afford 2 drive and maintain a V8 like most of us MEN :) dream of.

Out

User avatar
IndyBrit
N3O Officer
N3O Officer
Posts: 1318
Joined: Tue Feb 05, 2008 1:53 am
Location: Indianapolis

Re: Can Gas Cost get any Higher ?

Post by IndyBrit »

"benzene" will actually run pretty well in your gasoline/petrol car, but you wouldn't want to pay for it.

Some randomly selected company data for you, all data from the fiscal year ending in early 2008.
Company, profit/revenue %, tax/revenue %

microsoft 27.5% 0.8%
mcdonalds 18.2% 10.6%
eli lilly 15.8% 5.0%
proctor and gamble 13.5% 5.7%
exxon/mobile 10.0% 7.4%
alcoa 8.3% 5.1%
caterpillar 7.9% 3.3%
starbucks 7.1% 4.1%
cummins 5.7% 2.9%
wal-mart 3.4% 1.8%

That's a pretty good cross-section of company types. Exxon, as one example, is operating at a 10% net profit, compared to McDonald's which is operating at 18.2%. You can see that Exxon is strictly middle of the pack profit-wise.

Interestingly, they are paying exorbitant tax rates right now - higher than the higher profit margin companies except for McDonald's. However, taxes in any individual year should be taken with a grain of salt due to varying accounting games that can be played. You have to look over a period of several years for the games to level out.

By the way, Exxon took in $40 BB in profit last year, and paid $30 BB in taxes. They paid double the gross revenue of Microsoft just in taxes.

I do not see, based on their profit margins, how anyone can say they are overcharging or that they are making exorbitant profits. That argument makes as much sense as complaining that a group of 100 people breathe 100 times the air that a single person breathes.

User avatar
Palehorse
Honorary Member
Honorary Member
Posts: 216
Joined: Tue Nov 20, 2007 12:17 pm

Re: Can Gas Cost get any Higher ?

Post by Palehorse »

I think the argument comes in the form of 10 people getting 1000 times the air, whether they breath it or not.

That is to say, that for no effort on Exxon-Mobiles part (they are simply in the right business at the right time) they are suddenly making alot more per employee/share/equity than ever before.

They won the lottery.

The flight to commodity markets of investment capital is causing a bubble that will make dot.com and subprime mortgage look like fleas next to a gorilla. If the commodity markets cannot relieve the upward price pressure soon, there will be a global depression, if not worse, when all air goes out of the balloon. Today, the Chicago Merchantile (80% of global grain futures) said the ratio of speculator to producer:wholesaler dollars in grain markets is running 2.5-3:1.

I just wish I still had 550 acres of wheat, corn and soybeans :(
Image

User avatar
IndyBrit
N3O Officer
N3O Officer
Posts: 1318
Joined: Tue Feb 05, 2008 1:53 am
Location: Indianapolis

Re: Can Gas Cost get any Higher ?

Post by IndyBrit »

PH:
I understand the argument. My point is that the argument is incorrect. 90% of their revenue is consumed in costs of production and taxes - middle of the pack as described above. Where is that 90% going if not to "effort"?

User avatar
Palehorse
Honorary Member
Honorary Member
Posts: 216
Joined: Tue Nov 20, 2007 12:17 pm

Re: Can Gas Cost get any Higher ?

Post by Palehorse »

Precisely, it used to be 94.4% in 2002 and now it's ~90%, even though every input is undergoing inflation.

Moreover, in the Q4 of 2007 alone, they bought back 87,780,010 shares of their own stock. That means, earnings per share as an expense, goes back to the corporation as an issuer held share.

2002 - 5.6% net profit on total earning of 204,506 M$
2003 - 9.1% net profit on total earning of 237,054 M$
2004 - 8.7% net profit on total earning of 291,252 M$
2005 - 10.1% net profit on total earning of 358,955 M$
2006 - 10.5% net profit on total earning of 377,635 M$
2007 - 10.4% net profit on total earning of 390,328 M$
Image

User avatar
IndyBrit
N3O Officer
N3O Officer
Posts: 1318
Joined: Tue Feb 05, 2008 1:53 am
Location: Indianapolis

Re: Can Gas Cost get any Higher ?

Post by IndyBrit »

So in 2002 they were on the low end of profit margins, and in 2007 they are in the middle of the pack. That seems an argument for sympathy in 2002 rather than an argument for derision in 2007. If one is to apply a moral component to profits, of course.

I'm not sure what your buyback point is about. Buybacks are a balance sheet event, not an income event, and therefore they are not an "expense". In fact, in bad times, companies use buybacks to boost the earnings-per-share numbers without incurring an expense (ie to hide the ball). That's not why Exxon is doing it right now, but the important point is that the buyback is coming out of cash already reflected in the net income, and is not hiding some further net income as *I think* you are suggesting (although I may be misunderstanding your point on this).

User avatar
Palehorse
Honorary Member
Honorary Member
Posts: 216
Joined: Tue Nov 20, 2007 12:17 pm

Re: Can Gas Cost get any Higher ?

Post by Palehorse »

What happened in 2003, the year they magically double their percent profit? Talk about profiteering.

And comparing them to food service and intellectual property companies is bad correlation. How about comparing them to BP, Shell or Norway Oil for 2007?

BP - 7.4% on 284,365 ME
Shell - 9.0% on 355,782 ME
StatoilHydro (Norway) - 25.7% on 415,494 MNOK

Now if a state owned oil company can out earn all the big players on a percentage basis, wth are the big players problem(s). Or is it, as you alluded to earlier, just a bunch of balance sheet magic.
Image

User avatar
IndyBrit
N3O Officer
N3O Officer
Posts: 1318
Joined: Tue Feb 05, 2008 1:53 am
Location: Indianapolis

Re: Can Gas Cost get any Higher ?

Post by IndyBrit »

PH:
To be clear - I respect your view on this, I just disagree with it. :D

Yes, I would be very careful looking at single year results due to accounting effects. They will level out over time, but they can obscure what's going on at any given moment. They are not necessarily utilized for an improper purpose, but obscuring is obscuring.

Be especially on the lookout for the following: estimates of "goodwill" assets; capital asset deductions; loss carryovers for tax liability/credit; pension obligation adjustments; "one-time" special expenses; write-downs for expected risks (employee layoffs, ongoing or anticipated lawsuits, etc.); adjustments for offered stock options; adjustments to accounts payable (e.g. based on realistically collectible debts); ... (shrimp soup, shrimp sandwich, ... :) )

With oil companies specifically, you also have adjustments for estimated reserves in fields that are owned or leased, and many many more reasons for expected risks (environmental lawsuits, anticipated protests or legal obstructions to developing current reserves, anticipated political problems in certain places in the world).

With government-owned entities, the problem is exacerbated further. For example, government entities can manipulate pension holdings outside of the legal bounds for private entities, they can ignore margin or capital requirements, and they can usually work outside of generally accepted accounting practices. Also, government entities may be required to perform extra accounting duties that a private organization would not just because the lawmaking body decided that they should. Generally speaking, governmental body financial reporting, where the governmental body is a market player competing with private entities, is under such different standards that probably no comparison whatsoever can be made between the two.

lordandcount
N3O Officer
N3O Officer
Posts: 780
Joined: Wed Nov 14, 2007 11:03 pm
Contact:

Re: Can Gas Cost get any Higher ?

Post by lordandcount »

[quote=""LaZy""][quote=""lordandcount""]You guys in america are still lucky with benzine. Here it is 2 euro/litre cuz of tax etc[/quote]

U noob. Try putting "benzine" in ur dads car just 2 c what happens :P

Wikipedia states:"Petroleum ether, also known as benzine, X4 or Ligroin, is a group of various volatile, highly flammable, liquid hydrocarbon mixtures used chiefly as nonpolar solvents. Petroleum ether is obtained from petroleum refineries as the portion of the distillate which is intermediate between the lighter naphtha and the heavier kerosene."

U mean gasoline (which is a liquid) unlike what the smart americans refere 2 as "gas" (which, as the name suggests, is a gas).

In Portugal our petrol prices have gone up again 2day, 12 raise this year! Official figures show that for every €1 ($1.57) of diesel or petrol we load our car with €0.31 goes into the actual cost of the product ( ie extraction, transport, refinery costs, transport and marketing) €0.60 go into TAX and the remaining portions are due 2 market speculation and company profits. SIXTY f´ing percent!!!!!! Why do we put up with this? If it werent for these absurd tax "add ons" I could actually afford 2 drive and maintain a V8 like most of us MEN :) dream of.

Out[/quote]

I made a little mistake, just used the dutch name, we call gasoline benzine and call benzine olie, also we drive on gas (the real one, not american, it's typical dutch I suppose)
Image
NEO_CrAz3n wrote: L&C is sorta the N3O police.
I'm the most annoying officer

User avatar
Soccerman771
N3O Officer
N3O Officer
Posts: 2874
Joined: Fri Jan 18, 2008 7:25 am
Location: Sachse, Texas (near Dallas)
Contact:

Re: Can Gas Cost get any Higher ?

Post by Soccerman771 »

MSNBC Article: Gas to $15

$15/gallon gas????
jtackel@hotmail.com

"Do you know how difficult it is to micro Napalm?" - Lazy_Tuga

"This isn't going to work. I've picked a water deck and there isn't even a pond on this map." - Blackadderthe4th

User avatar
IndyBrit
N3O Officer
N3O Officer
Posts: 1318
Joined: Tue Feb 05, 2008 1:53 am
Location: Indianapolis

Re: Can Gas Cost get any Higher ?

Post by IndyBrit »

Maybe if Congress flogs the oil executives harder, they will release all that fuel they've been hiding under their pillow.

I think the $15 scenario can't happen - not unless someone (and I hope W isn't dumb enough, but who knows?) institutes price controls which will ensure we get really deep into this by disconnecting the consumer from the cost of his consumption.

User avatar
Palehorse
Honorary Member
Honorary Member
Posts: 216
Joined: Tue Nov 20, 2007 12:17 pm

Re: Can Gas Cost get any Higher ?

Post by Palehorse »

"Abortions for some, miniature American flags for others."

My problem with the entire situation is the short term thinking that has become so pervasive throughout America Inc. Corporate governance focuses on investor relations and stock value growth.

My touching on Statsoil was a deliberate attempt to point out how a country has decided to make it's long term survival (78% of oil profits are saved, can only be invested OUTSIDE of Norway to prevent internal economic or political influence), seed vault, income parity, high disposable income, unemployment of 2%, high education and education investment. So they run a very lean oil sector, and save the profits.

I guess when you look at a country like the USA with a GINI Index of ~.40, its little wonder people are ready to storm Versaille when they can't afford gas to go to work.
Image

User avatar
rufio_eht
Honorary Member
Honorary Member
Posts: 441
Joined: Wed Jan 02, 2008 9:03 pm

Re: Can Gas Cost get any Higher ?

Post by rufio_eht »

[quote=""IndyBrit""]PH:
Yes, I would be very careful looking at single year results due to accounting effects. They will level out over time....[/quote]

this is an overly optimistic view imho, given the nature of corporations as we have seen them.

I'm not going to try to make any moral claims regarding profits and price, except that this appears to be collusion, and if other industries follow suit, america could face a serious depression.

accounting is just like law, there will always be loopholes, and unethical behavior. to think that nothing wrong is going on in this situation seems naive to me.
"Rock and roll is the hamburger that ate the world." --Peter York

Post Reply